Many people are homeowners, so it's not surprising that many people have been asking if they'd be eligible for the new, $6,500 tax credit intended for repeat buyers. One sticking point has been the legislative language used to explain eligibility:
In the case of an individual (and, if married, such individual's spouse) who has owned and used the same residence as such individual's principal residence for any 5-consecutive-year period during the 8-year period ending on the date of the purchase of a subsequent principal residence, such individual shall be [eligible for the credit] with respect to the purchase of such subsequent residence.
Does that mean people who lived in their homes for the past five years and want to move on? People who lived in their homes for at least five years after late 2001, have since been renting it out and now want a new primary residence? People who lived in their homes for at least five years after late 2001, sold the place and now want to buy again?
I posed this to a Senate Finance Committee aide, and he said yes. Yes to all three.
I wondered that to begin with, but the "ending on the date of the purchase of a subsequent principal residence" part made me second-guess myself.
I urge you all not to spend that $6,500 before it's a sure thing that you can get it -- let's see what the IRS has to say, eh? But Wonk reader SSK, it does look like you can take advantage of the credit. (SSK posed this question: "I lived in my Baltimore house for 12 years. Just sold it in July. I re-located to Ohio and am renting. I'm about to bid on a new home. So, I lived in my home for more than 5 years, but I'm temporarily renting now. Do I qualify?")
And you, too, Mark. (He notes, "My wife and I sold our previous home on 9/10/09. We had owned that home for 9 years. We have been living in an extended stay hotel ever since, while we are looking for our next home. We expect to purchase our next home before the end of this year. We meet the income requirements of this bill. So will we be eligible for this $6500 tax credit even though we have already sold our previous home about 2 months ago?")
But you can't qualify if you already bought the new home, the situation that reader Carrie Nelson is in. "We closed on our new home on September 18, 2009. We have just rented our old home because we were unable to sell it. Will we be eligible for the repeat home buyer credit? Why can't they just approve it for any home purchased in 2009. Isn't that something that was done for the first-time homebuyer tax credit?"
The $8,000 version of the first-time buyer credit, passed in February, was made retroactive to the beginning of the year. But the IRS said Friday -- as the legislation was signed into law by President Barack Obama -- that the new provisions would go into effect today, Nov. 7.
Exactly who qualifies should be clearer as soon as the IRS offers more details, as it did with the first and second versions of the first-time home buyer credit. On its home buyer tax credit page, it promised "more to be added soon."
UPDATE: If you're thinking of asking a question, please take a look at this frequently-asked-questions piece -- and the questions and answers in the comments below this post -- to see if it's been answered already. Then, and only then, ask your question here.
I MEAN IT.
I'm happy to help, but not so much if I've already answered the question several times. If you ask a question that shows you disregarded this plea, I might have to break out the snark.